The American Benefits Council believes it has the answer to saving employee pension plans.
According to its research, there are only 47,000 active pension plans today, compared to 175,000 decades ago. The American Benefits Council has unveiled a six-point plan to address the ongoing, accelerated decline in defined benefit pension plans.
"There are many reasons for the long-term decline, including funding and accounting volatility, competitive pressures, employee preferences, and workforce changes," Council President James Klein said. "Recently, the decline has markedly accelerated due to the unpredictability of additional costs."
To save the plans that are left, funding stabilization must be made permanent; pension accounting standards must be stabilized; Pension Benefit Guarantee Corporation insurance premiums need to be based on stable long-term assessments of need; businesses should not be prevented by the PBGC from engaging in necessary and positive business transactions; Congress, the U.S. treasury Department and the Internal Revenue Service must avoid developing nondiscrimination rules that encourage pension plan closures; and workable rules for hybrid pension plans are critical, according to the American Benefits Council.
"These proposals would raise tens of billions of dollars of revenue and help to create jobs by preventing unnecessary diversion of company assets and stimulating business expansion," Klein said.
The Council is urging lawmakers to consider these proposals as they fashion a plan to address the federal deficit, economic growth and tax and entitlement reform.
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system.